Choosing the right structure for your group, either right at the start or when you are ready to be more formally established, is an important job. The way you set up will have a big effect on what you can do and how you can develop.
The table below will take you through the main options, their pro’s and con’s.
An incorporated structure means that the organisation is a legal entity in itself. That gives trustees or directors extra protections.
Incorporated legal structures
Type | Who controls?* | What is the governing document? | Who is the regulator? | Limited liability? | Profit distribution? | Charitable status available? |
Charitable Incorporated Organisation (CIO) – either Association (wider membership) or Foundation (just trustees as members) | Board of trustees | Constitution | Charity Commission | Yes | No | Yes, automatic |
Company Limited by Guarantee (CLG) | Board of directors | Memorandum and articles of association | Companies House (and Charity Commission if it has charitable status) | Yes | Usually no | Yes |
Community Interest Company | Board of directors | Memorandum and articles of association | Companies House and CIC regulator | Yes | Yes, but must benefit wider community | No |
Community Benefit Society (previously IPS) | Management committee | Rules | Financial Conduct Authority | Yes | No | Yes |
Cooperative Society | Management committee | Rules | Financial Conduct Authority | Yes | Yes | Very rarely |
Unincorporated legal structures
Type | Who controls?* | What is the governing document? | Who is the regulator? | Limited liability? | Profit distribution? | Charitable status available? |
Unincorporated Association | Management committee | Constitution | Charity Commission (if charitable and income is over £5000 per year) | No | No | Yes (if purposes are solely charitable) |
Charitable Trust | Board of trustees | Trust deed | Charity Commission | No | No | Yes |
*The members of the governing body of a legal structure may actually be known by many different names including as trustees, directors, board members, governors or committee members.
Disclaimer
We make every effort to ensure that our information is correct at the time of publication.
This is only intended as a brief summary of relevant issues and information. Legal advice should be sought where appropriate. The inclusion of other organisations in this information does not imply any endorsement of independent bodies, they are just for signposting purposes.
Voscur is unable to accept liability for any loss or damage or inconvenience arising as a consequence of the use of this information.
